Allied Blenders and Distillers Ltd (ABDL) saw its shares drop by 4% in trading on October 30, 2026, as analysts presented divided opinions on the company's growth prospects, premiumisation strategy, and potential for margin recovery. The stock touched a low of Rs 685, down from its previous close of Rs 710.05.
The divergent views emerged following the company's September quarter results, prompting significant discussion among financial institutions.
HDFC Securities Downgrades ABDL Amidst Execution Concerns
HDFC Securities downgraded Allied Blenders' stock from 'Add' to 'Reduce', retaining its target price at Rs 685. The brokerage highlighted several areas of concern, including significant execution risks and the company's escalating debt. A key point of contention was ABDL's heavy reliance on a single brand for its premium growth, alongside an aggressive capital expenditure program that could further strain its already leveraged balance sheet.
Furthermore, HDFC Securities expressed reservations about the quality of growth, noting that Prestige and Above (P&A) volumes grew by only 6% in the September quarter, significantly lagging behind the 16% growth observed in the mass-premium segment.
Ashika Institutional Equities Maintains 'Hold' Rating
Ashika Institutional Equities opted to retain its 'Hold' rating for Allied Blenders, setting a target price of Rs 715. This target implied a limited upside of approximately 2% from the reference price. Ashika's report indicated that the growth momentum for ABDL's ICONiQ White brand had moderated, with volumes appearing to stabilize around one million cases per month.
The brokerage also pointed to uncertainty surrounding margin recovery, despite the company's guidance of achieving gross and EBITDA margins of roughly 48% and 18%, respectively, by FY28. While Allied Blenders' adjusted net profit increased by 9.7% year-on-year to Rs 69 crore in Q2FY27, Ashika noted that this improvement was partly supported by a change in depreciation accounting, which reduced expenses by Rs 4.97 crore.
Nomura Remains Bullish, Raises Target Price
In contrast to HDFC Securities and Ashika, Nomura maintained its 'Buy' rating for Allied Blenders and Distillers. The firm also raised its target price from Rs 850 to Rs 900, suggesting an upside of 28.2% from the reference price of Rs 702. Nomura's optimistic outlook is predicated on an expected improvement in the P&A portfolio's growth during the second half of FY27.
This anticipated growth is projected to be fueled by planned brand relaunches, the introduction of new premium offerings, and the continued expansion of the ICONiQ White brand. Additionally, Nomura expects benefits from backward integration initiatives to begin contributing positively to the company's margins.
Disclaimer: This article provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.